Hudson v Entsch

REASONS FOR JUDGMENT 1 The first respondent seeks his costs as against the applicant. The second respondent seeks no order as to costs. Pursuant to s 371 of the Commonwealth Electoral Act 1918 (Cth) (the "Electoral Act"), the Court has power to order an unsuccessful party to pay the costs of the proceedings. The applicant is clearly the unsuccessful party. The question, then, is whether the discretion ought to be exercised by making an order against him and in favour of the first respondent, and, if so, upon what terms. 2 The applicant has pointed out, in opposition to the application, that the first respondent did not file a defence until quite late in proceedings. That is so, but it really has no relevance for present purposes. The circumstances in which that incident occurred arose out of the way in which these proceedings have been conducted. At an early stage, an application was made to strike out the petition. That application was substantially successful. Only three paragraphs remained in the petition. Those paragraphs alleged the statement made by Mr Entsch on television and the fact that signs had been knocked down. At the hearing at which the balance of the petition was struck out, no directions were sought as to pleadings, and it did not occur to me to give any. It is probable that the need for pleadings was not identified simply because the factual basis of the proceedings appeared to be clear and undisputed. 3 However, in the course of the hearing of the matters raised in the remaining paragraphs of the petition, it became apparent that counsel for the first respondent proposed to argue that the statements made by the applicant in his signs were defamatory and false and therefore contrary to s 350 of the Electoral Act. At that stage, it occurred to me that such matters ought to have been raised on the face of the pleadings, and so I directed the first respondent to file a defence to the petition, which he did. However, as appears from my reasons, that issue was not, in the event, ventilated in any meaningful way at the hearing. I do not consider that the raising of that issue significantly increased the costs of these proceedings. In those circumstances, the failure to plead at an earlier stage has only marginal relevance to the exercise of the discretion. 4 Secondly, the applicant asserts that he had a genuine belief that he could succeed in these proceedings. He says that he made inquiries of a solicitor, who offered him advice to that effect. I have no view as to whether or not the applicant genuinely considered that he could be successful. I have already made some observations as to the circumstances in which the proceedings were commenced, having regard to the background of dealings between the applicant and the first respondent. I do not propose to add anything to them. Many litigants commence proceedings believing that they have fair prospects of success, but fail. Not infrequently, indeed usually, they are ordered to pay the costs. 5 Finally, and this, perhaps, is the most significant of the applicant's submissions and the most meritorious, it is said that the matter involved a significant question of public interest, and that, for that reason, an order for costs ought not be made against him. It is true that the matter raises a question of public interest. The second respondent demonstrated a significant interest in having light thrown upon the relevant provisions of the legislation, which provisions pose some difficulties of construction. I do not pretend to have solved those problems. I have sought to identify them and have offered my opinions, which are conclusive as between the present parties, subject to such rights of appeal or review as may be available. Whether the decision has any wider value is for others to determine. I say that only because it highlights the fact that, whatever the public interest may have been in these proceedings, that consideration does not lead to the conclusion that the first respondent should be compelled to pay the costs incurred by him in defending them. He did not choose to come here; he did not choose to raise the issues for determination; and there can be little doubt that, had he had the option, he would not have sought to be involved in these proceedings. 6 Where a government agency is involved in proceedings which have a public interest element relevant to the activities of that agency, it may choose not to seek an order for costs in the event that it is successful. Indeed, the second respondent has adopted that course in these proceedings. However there is great potential danger in allowing individual members of the public to decide that particular issues are of public interest if that means that others must pay for the ensuing litigation. An individual should not be encouraged to think that he or she can litigate without the risk of an order for costs in the event that he or she is unsuccessful, merely because he or she considers that there is some aspect of public interest to be vindicated in the litigation. The question is whether the first respondent or the applicant should bear the first respondent's costs of these proceedings. The applicant started the proceedings; the first respondent had no choice in the matter and resisted them. I consider that the better outcome is that the applicant pay those costs. I therefore order that the applicant pay the first respondent's costs of these proceedings, including reserved costs, subject to one qualification. It is appropriate to exclude from that order the costs of and incidental to the preparation and filing of the defence. I so order. 7 The first respondent seeks an order for costs on an indemnity basis. Although I have significant misgivings as to the applicant's motivation in commencing these proceedings, there is a degree of uncertainty about the legislation. For that reason, I would be reluctant to order that costs be paid on an indemnity basis, particularly having regard to the public interest factor to which I have referred. I also note that, given the way in which the matter has proceeded, it is not clear to me that there should be any significant difference between party-and-party and indemnity costs. I am reluctant to encourage the view that there must always be a difference between the two. Mr Miller has frankly conceded that it is sometimes difficult to know. In those circumstances, I propose to order that the costs be paid on a party-and-party basis and not on an indemnity basis. The order will be that the applicant pay the first respondent's costs on a party-and-party basis, including reserved costs, excluding the costs of and incidental to the preparation and filing of the defence. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.